Question-and-Answer Session
Operator
Your first question comes from Steve Barger - Keybanc Capital Markets
Steve Barger - Keybanc Capital Markets
Back to your prepared comments can you tell me what that means to spend more resources in the area of risk management, what will that really entail?
William Furman
I think that it’s important to participate in the industry groups that are also studying the issue of transfer of risks from class one railroads to the rest of the supply chain network. We are active in several of these and I think it’s an important subject and that’s the area that I was referring to.
Steve Barger - Keybanc Capital Markets
Have you already started that process and have you found ways in those industry groups to offset some of those risks of class ones pushing costs down?
William Furman
Yes, I think that while it’s a trend, it’s not something that is shifting rapidly; it’s just a longer term thing that I think we have to be conscious of.
Steve Barger - Keybanc Capital Markets
Okay. Quarter-to-date 3Q ’08, can you talk about order activity, any activity so far?
Mark Rittenbaum
Yes there is activity out there. We do have orders subsequent to quarter-end and so there’s still activity and obviously the market environment that—we described the market environment in our prepared remarks as being an increasingly difficult market environment.
Steve Barger - Keybanc Capital Markets
Okay. For your total backlog of 19,000 cars, what’s deliverable in 2009 from that? Do you have that number?
Mark Rittenbaum
We don’t breakout the backlog by year other than the current year’s production.
Steve Barger - Keybanc Capital Markets
Okay and last question, we know that grain prices are near all time highs, so are diesel and fertilizer costs, you talked about the transportation, given those dynamics can you tell me what you think utilization rates are for the covered hopper fleet in general and are you seeing customers talking about dialing back CapEx budgets due to input costs inflation?
William Furman
Most of our CapEx budget and I know you’re talking about customers but I want to take the opportunity to say it, most of our CapEx budget is on expansion and efficiency enhancement in our Mexico joint venture facility. We believe there remains very decent demand for covered hopper cars of several types but I think that grain is still—there’s still a lot of activity in grain. Some of the stimulus package that was put together probably favors orders this year and there are a couple of major transactions in the market. Having said that we’re seeing both substantial competition, we’re seeing the pressures in the short run on pricing which are toward fixed priced deals and the market is generally not tremendously positive and this was reflected in our financial performance.
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